Rental Growth achieved
Avignon Capital acquired Fontanella 6-8, located in the heart of Barcelona’s city centre in the area of Plaça de Catalunya, one of the busiest tourist locations in the city.
The area is a prime retail and commercial core location and located opposite the building is the department store El Corte Ingles (the world’s third largest department store operator).
The building is arranged over basement, ground floor and six upper levels and was fully let on acquisition to the Government of Cataluña and occupied by the Tax Administration of Cataluña.
The business plan on acquisition was to maintain the secure long income from the Government of Catalunya, whilst simultaneously creating a new retail offering through reconfiguration works on the ground and first floors.
A new 10-year lease with annual CPI indexation was agreed with Media Markt, the leading European consumer electronics retailer, who began trading from the property following the completion of upgrade works in December 2016.
The asset management initiative to create a new retail offering increased the rent by €350,000 p.a and capital value increase of 160%.
Avignon completed the off-market sale of Fontanella 6-8 for €65m, producing a 135% return on equity.